The Three Top US Business Schools: So, What’s the Difference?

Something unprecedented has occurred at the pinnacle of this year’s QS Global 200 MBA rankings for North America – a three-way tie. Sure, the names involved – Harvard Business School, the Wharton School and Stanford GSB are arguably exactly the US business schools you’d expect to find in such a three-way tie, but it’s still a pretty rare occurrence in the world of MBA rankings.

The MBA rankings are based on the esteem in which the schools are held by two expert demographics: actively hiring MBA employers (85%) and academics in the field of business and management (15%). So, as far as these two groups are concerned, you can’t really go too far wrong with any of these three venerable US business schools.

But, of course, they are very different institutions, with their own unique selling points. So, what’s the difference? It’s impossible to present a perfect picture of an institution’s ‘fit’, but here are a few things that might be able to help you on your way.

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History

Each of these US business schools has played a pivotal role in the history of the MBA. Wharton, founded in 1881 was the world’s first collegiate business school and publishers of the world’s first textbook on international trade, Harvard was the birthplace of the MBA and the case study method, and the foundation of Stanford GSB (at the behest of none other than future president Herbert Hoover) was part of a successful bid to stop a brain drain to the east coast – you’d be hard-pressed to identify such a brain drain today…

Who studies at HBS, Wharton and Stanford GSB?

As you might expect, you have to be quite special to even think about studying at one of these august US business schools. Stanford is one of the world’s most competitive institutions, with only the massively over-subscribed Indian IIMs really giving its 6.8% acceptance rate (to become one of the 410 students who make up the class of 2016) a run for its money.

Harvard’s class of 2016 comprises of 936 students; 12% of total applicants, while Wharton’s class of 859 represents 14% of the total applicants. Stanford also leads the way for gender parity, with females making up 42% of its class of 2016; HBS and Wharton are not too far behind on 41% and 40% respectively.

HBS’s class of 2016 is 27 years old on average, and hail from a total of 73 nations, the US accounting for 65% of students. Collectively the MBA cohort can count 282 alma maters between them, at which 41% studied economics or business, 40% STEM subjects, and 19% humanities and social sciences. The most common industry backgrounds are consulting (18%), venture capital/private equity (17%) and financial services (14%).

Wharton’s class of 2016 has an average work experience of five years, which would presumably put the average age in a similar ballpark to HBS. International students, from 70 countries, account for 31% of the class. At undergraduate level, 45% studied humanities/social science/economics, 27% business, and 23% STEM subjects (with 5% studying ‘other’ subjects). In terms of industry background, consulting again comes in at number one (20%), followed by government/military/nonprofit (13%). Private equity/venture capital is tied with consumer products/retail/health care/energy in third (12% each).

At Stanford, the equivalent MBA cohort has an average of four years of workplace experience. The class is more international than either of its eastern rivals, with 44% of students coming from outside the US, although they come from a smaller number of countries (62 – although, recall, there are far fewer of them). A total of 158 undergraduate institutions are represented, with humanities and social sciences accounting for 48% of the cohort, engineering, mathematics, or natural sciences for 28% and business for the remaining 14%.

Average GMAT scores for this elite trio range from 728 at Wharton, to 730 at HBS and 732 at Stanford GSB, so if you have designs of studying at one of these three…well, you’d better knuckle down.

MBA admissions

So, think you’re capable of joining these elite MBA cohorts? Here’s the MBA admissions process in a nutshell:

At all three schools, of course, you can expect to be asked for a GMAT score, proof of your proficiency in English if you’re from a non-Anglophone background, and two letters of recommendation – one of which needs to be from your direct supervisor.

Wharton has two MBA admissions essay questions with which to contend for entry into the class of 2017: a required question tackling what you hope to gain from an MBA, both personally and professionally (500 words), and an optional question highlighting anything else you’d like the admissions committee to know (400 words). Any re-applicants must complete a 250 word essay on how they’ve reflected on their application and what has changed since they last applied. Other candidates may use this section to discuss extenuating circumstances.

At Stanford GSB, the two MBA admissions essays are both compulsory. The first is a famous challenge asking you to say what matters most to you and why. The second simply explores why it is that you want to study at Stanford. Collectively, these two essays should weigh in at 1,100 words, though the school recommends that you use 750 words for the former, saving 350 for the latter.

HBS, on the other hand, asks for only one MBA admissions essay. The topic is perhaps rather daunting in its open-endedness, asking you simply what, beyond what can be seen on your résumé and credentials, you’d like the admissions committee to know about your application. Perhaps even more dauntingly, there is no word limit…

Curriculum and specializations

At Stanford GSB, the first year of the MBA is split into three parts: General Management Perspectives, central to which is the debate of “fundamental issues, questions, and phenomena that arise in management”, General Management Foundations, a personalized base for your general management education, and a required global experience – for which you can take a study trip, work on a project, or even come up with your own self-directed experience. In your second year you take up to 18 electives, and have the option of taking two-week ‘compressed courses’ as well as other classes at the university which can count towards your MBA.

Wharton’s MBA allows candidates to choose from 18 majors, consisting of five electives. Around 30% of candidates, says the school, pursue a double major. You can take other electives to round out your experience, or even design your own major if you are so inclined – a route taken by 10% of students. The core curriculum is split into fixed core courses, which cover the usual fundamentals, and flexible core courses, which give you options to build on these fundamentals according to your preferences. Included in the options are opportunities to work or study abroad. The first semester is spent working in a team established by the school in pre-term.

The MBA cohort at HBS all go through the same first-year curriculum, which is split into the required curriculum, covering the usual basic MBA topics, and the three-part Field Immersion Experiences for Leadership Development (FIELD). As the acronym suggests, this gives students an opportunity to put theory into practice, starting in ‘hives’ at the school, before moving onto an emerging market, and finally designing and launching a microbusiness. The second year is given over to the elective curriculum, which also allows for cross registration into other select graduate programs at Harvard, MIT or Tufts.

Fees and scholarships

As is de rigueur at top US institutions, all three schools provide full estimated breakdowns of what it will set you back to study there. In terms of fees, there’s not a great deal in it – you certainly won’t be able to pick one rather the other based purely on cost.

If it was a contest, HBS would come out on top (or on the bottom, perhaps), with annual fees of US$58,875, and a total estimated cost of US$95,100 per year. Wharton is next, with equivalent figures of US$68,210 and US$97,542 respectively, while Stanford had the dubious honor, along with NYU Stern, of topping US$200,000 for two years of MBA study. Annual fees are US$61,875, while the total cost for a year of Stanford GSB life – were you to live off campus – would stand at US$104,046 (the figure is slightly below US$100,000 if you choose to live on campus, but these estimations don’t include the costs of the required study abroad segment).

Of course, aid and scholarships are on offer. HBS, like Harvard as a whole, operates a need-blind admissions policy, but offers need-based fellowships and loans to help students meet the financial demands of MBA student. A total of 65% of students receive some kind of financial assistance.

At Wharton, students will be automatically considered for a range of Wharton fellowships. Beyond that, federal loans are available for US students, while a deal with the Quorum Federal Credit Union allows international students to borrow up to 80% of the MBA student budget.

Stanford GSB admissions are need-blind, and the school offers only need-based, and not merit-based, fellowships. Around 50% of GSB students receive fellowship funds, while two thirds use loans. As well as need-based fellowships and loans, Stanford offers non-need based loans to eligible students.

The big names: faculty and alumni

As you might expect, all three of these top-US MBA programs can boast some pretty amazing names, both in terms of those who have studied and those who teach there.

Stanford GSB, for instance, has had Nike founder Phil Knight, GM CEO Marry Barra (the highest placed female CEO in any Fortune 500 company) and EA founder Trip Hawkins pass through its MBA program. And its faculty can boast three Nobel Prize winners, three John Bates Clark Medal winners, 18 members of the American Academy of Arts and Sciences, five members of National Academy of Sciences among other accolades.

Wharton on the other hand, is the alma mater of one Donald Trump, marketing legend John SculleyIII (to whom both the Apple and Pepsi of today owe a considerable debt), and, indeed, the founder of the organization whose website you are now reading, Nunzio Quacquarelli. The school currently tops UT Dallas’s Business School Rankings Based on Research Contributions, so you can’t really do much better in terms of feeding the academic canon.

HBS, of course, won’t be easily bested, with alumni like former NYC mayor Michael Bloomberg, Facebook COO Sheryl Sandberg, and famous painter of dogs George W Bush. HBS is not only the birthplace of the case study method; it is also by far the world’s biggest seller of case studies. Indeed, nearly 80% of cases sold around the world are penned by Harvard Business School faculty. Influential isn’t even the word…

MBA job outcomes

It’s probably safe to say that, possessed of the dual assets of having had the drive to get into one of these schools in the first place and then having successfully completed the MBA course there, you are unlikely to struggle in your MBA job search.

The HBS’s 2014 employment report shows that finance was the most popular industry, with 33% of graduates choosing this path – a 6% increase on the previous year. Private equity/venture capital/leverage buyouts seems to be the driving force behind this, accounting for 15% of MBA jobs. The recovering appeal of Wall Street may have something to do with this, with 23% of HBS MBAs choosing to work in New York City. This was offset in an eight-year low in those taking overseas jobs, down to 16% - a 2% decline in those taking MBA jobs in Europe is the primary cause of this. A total of 23% of HBS MBAs took jobs in consulting, while 17% opted for the technology sector.

At Stanford GSB, it seems there has been a shift away from the technology sector with which the university and Palo Alto as a whole are practically synonymous. The school’s 2014 employment report shows only 24% of Stanford GSB graduates took jobs in the technology sector, compared to 32% the preceding year (though this was a high, the equivalent figure also stood at 24% the previous year). Internet services and e-commerce have notably fallen in popularity considerably since 2012 when they accounted for 18% of the total graduating class; a mere 9% followed the same path in 2014. Finance, on the other hand, has regained its status as the most popular career path, accounting for 29% of the cohort, with private equity alone accounting for 12%. A relatively modest 16% chose the path of consulting.

Wharton seems to be the most finance orientated of the schools featured here, with 36% of the class of 2014 choosing a career in the financial services – this is, however, the school’s lowest proportion since 2000. Investment banking is the most popular of MBA jobs for Wharton MBAs, accounting for 14% - again, however, this is lower than any point between 2002 and 2012, although it is a rise on last year. Consulting, at 26% is the next most popular career path – another high in this triumvirate, but another low for Wharton, representing a lower percentage than any year since 2004. Technology, on the other hand, is on the up – accounting for 14% of Wharton MBAs in 2014, a record high in a year of lows!

But what about salary, we hear you asking? Well, be it chance, inevitability or some kind of mystery collusion, all three schools happened to post the exact same figures this year: a median base salary of US$125,000, with a signing bonus of US$25,000.

Of course, MBA rankings are never final, so it will be interesting to see what results next year’s exercise throws up. For now though, its shared honors for these three éminences grises of business education.

At a glance